Across Canada, hundreds of thousands of co-op, non-profit and public housing units have been receiving subsidies for decades from the federal government. These subsidies, which allow very low-income families to be housed, are beginning to run out, and this phenomenon will accelerate over the next five years. The number of housing units benefitting from long-term agreements decreased from 630,000 in 2006 to 613,500 in 2010. The Canada Mortgage and Housing Corporation (CMHC) predicts this number will go down to 540,800 in 2015. This trend will continue, so that by 2032, the federal government will no longer fund any housing units. All social housing units built before 1994 will be affected. This represents a loss of $1.7 billion in funding per year.
The withdrawal of federal funding will have dramatic consequences. Low-income tenants living in co-op and non-profit housing will lose CMHC funding that allows them to pay rent geared to their income. These tenants will face steep rent increases, forcing them to leave, and be replaced by more affluent tenants.
If nothing is done, the housing crisis in Canada will be aggravated. Already, there are 982,000 Canadian tenant households facing core housing need. This loss of federal funding comes on top of cuts to federal funding for the creation of new affordable housing, which is at its lowest level in decades.
We need to preserve existing social housing, not only for current tenants, but for all households who will need it in the future. FRAPRU (Front for Popular Action on Urban Restructuring of Quebec) which brings together over 100 organizations working for the right to housing, supported by its allies of the Red Tent Campaign (http://redtents.org/) , a Coalition of housing groups from different provinces, are working to put pressure on Stephen Harper’s Conservative government. The Red Tent campaign is demanding that the federal government immediately commit to maintaining funding for social housing, after the termination of long-term funding agreements signed when these units were originally built.
To do so, we call on all committees, tenants associations, co-op federations, social housing groups, social justice and anti-poverty organizations in all provinces to organize demonstrations, rallies or actions on the weekend of May 25-27,2012. On this weekend, there will be a big demonstration in Montreal, where at least one thousand people are anticipated. Check the tab with your province to see what is happening where you live. If nothing is planned, contact Red Tent and we can support you in organizing with us.
Meanwhile, we ask all those who are either directly affected, such as tenants of co-op, non-profit or public housing, or those concerned about the preservation of our social housing stock, to print, sign and circulate the Petition asking the government of Canada to:
- immediately commit to an adequate budget that ensures the renovation, improvement, and modernization of all social housing units (low-cost housing, cooperatives, and non-profit housing);
- immediately commit to maintaining the long-term subsidies granted to social housing units created before 1994, in particular those that allow low-income tenants a rent that is geared to their income (corresponds to their capacity to pay).
The original copies of the petition must be returned to FRAPRU by April 30, 2012, in order for them to be delivered to the House of Commons.
Ottawa Must Act: The Survival of Social Housing is at Stake
Before 1994, the federal government provided funding to build thousands of units of social housing across the country, and signed agreements to fund them for specific time periods (usually 35 years). The federal government has put very little money into new social housing since that time, and is not planning to renew this annual funding of social housing once these agreements expire. This funding covers much of Canada’s housing cooperatives, non-profit or low-cost housing. Unless Ottawa changes its mind, most, if not all, of social housing in Canada will be affected.
This de-funding is already underway, and will accelerate over the next five years. Across Canada, the number of social housing units benefiting from federal subsidies has decreased from 630,000 in 2006 to 613,500 in 2010 (16,500 units). The government predicts at least 72,000 more units will lose funding by 2015.
For many tenant households living in housing cooperatives and non-profit housing, this loss of federal funding means rents will rise by $200 or $300 a month. This increase will force many low-income families to move, as they will be unable to afford these higher rents.
As far as public housing goes, federal funding will expire by the end of this decade. The economic impact of this federal withdrawal is still unclear, nor is the reaction of provincial governments. While some provinces may have the will and the means to preserve social housing, others do not. This will create disparities in housing across the country.
An Important Social Program That Must be Preserved
Social housing is a rare and precious resource and the creation of new units has progressed at a snail’s pace over the past number of years. Preserving existing social housing is much more affordable than only building new units, and without federal funding we will lose more social housing than we can create.
According to Statistics Canada, some 1.49 million Canadian households (12.7%) faced core housing need in 2006, the most recent year data was available. This is a need the private rental housing market is unable to meet. Can we afford to allow Ottawa to gradually abandon all of its social housing responsibilities? Can we risk the elimination of this irreplaceable social program, both for current tenants, as well as for future generations?
The Red Tent Campaign believes we must stop the federal government from shirking its responsibilities. We invite all individuals and organizations concerned about the right to housing to get involved in the fight to defend existing social housing across Canada, and stop the eviction of the most vulnerable tenants. We are joining forces with housing groups across Canada in this struggle.
Federally Funded Social Housing
Many of the social housing units in Canada were built before 1986, and financed under the “56.1” Program. Today the vast majority, if not all of the funds disbursed under this program go to low-income tenants.
Another federal program that existed between 1986 and 1991 allowed for the creation of housing cooperatives. It is known as the Index-Linked Mortgage, or ILM Program. Under this program, low-income households receive a subsidy that allows them to pay rent geared to 25% of their income.
The last large federal housing funding program ended in 1993. It provided a subsidy to the operating deficit of housing administered by provincial and not-for-profit housing organizations.
According to most of the agreements signed with the Canada Mortgage and Housing Corporation (CMHC), these housing projects will lose their federal funding once their mortgages expire. The duration of these mortgages varies between 25 and 50 years, but they generally last 35 years. At the outset, it was thought that once these mortgages were paid off, surpluses would arise, allowing for continued subsidies to low-income households, without any federal funding. Unfortunately, for many groups this has not been the case.
Some projects have been forced to renew their mortgages in order to undertake major renovations. The financial “cushion” that had been hoped for has not materialized. This is the case for many projects that involved the purchase and renovation of existing residential buildings.
Given the explosion in construction costs, other projects have found that sums put away in reserves to undertake necessary renovations are insufficient. Money otherwise saved when mortgages expire will have to go towards these expenses.
Finally, the incomes of tenant households in social housing who benefit from rental subsidies have not kept pace with inflation. As the poor get poorer, the gap between their ability to pay and their rent has continued to widen. For those receiving social assistance, the rental subsidy has changed little over the years, and has actually gone down once inflation is factored in. It is impossible for individuals whose incomes have not changed in 35 years to pay more rent.
For all of these reasons, many housing cooperatives and non-profit housing organizations will face dire consequences without subsidies from the federal government. Low-income tenants will be penalized, and may be forced to leave their social housing units, thus increasing the numbers of the poorly-housed in Canada. The housing crisis that will result, including increasing family homelessness, will be costly both socially and economically.
Working with Opposition Parties to Put Pressure on Ottawa
We have asked opposition parties to raise this important issue in Ottawa. This has already brought these results:
The NDP have questioned the Conservatives regarding their intentions to continue federal subsidies once mortgages expire; and the official (opposition) critic for housing has committed to raise this issue with the Parliamentary Press Gallery.
The Liberals have called for the continuation of special subsidies for renovations included in Canada’s Economic Action Plan of 2008. Many housing cooperatives, non-profit and low-cost housing projects tapped into these subsidies. They have also called for the CMHC to launch a study of the impact of the termination of federal funding on social housing and low-income tenants.
The Green Party supports the delivery of social housing dollars to provincial, territorial and municipal governments through the traditional vehicle of the Canada Mortgage and Housing Corporation (CMHC). Their platforms states that they would change the mandate of the CMHC to include a responsibility, as it once had, for affordable, non-market and co-operative housing and dramatically increase its funding.
During the last parliamentary session, the Bloc Québécois called on the federal government to renew its operating agreements signed with housing cooperatives and non-profit housing organizations, and to maintain its subsidy programs.
Stephen Harper’s Priorities
While his government is not planning to renew the expiring subsidies, and thus save $1.7 billion on the backs of low-income tenants in social housing, Mr. Harper is also:
- spending $22 billion annually on the Minister of National Defence;
- defending a decision to invest over $30 billion over the next 20 years on the purchase and maintenance, without any bidding process, of fighter planes (though this decision is currently being questioned and re-evaluated);
- passing a criminal justice act that will force the expenditure of billions of dollars on the construction of new prisons;
- implementing gargantuan spending increases on public security (RCMP, prison system, border controls, etc.); since 2004-2005, their budget has shot up from $5 billion to $9.7 billion yearly;
- decreasing corporate taxes, which were reduced by 1.5% in January 2011, and another 1.5% in January 2012, to a tax rate of 15%. These tax cuts alone to corporations represent three times the annual federal housing budget.
A National Weekend of Action is planned to coincide with the tabling of the petition in the House of Commons, and housing groups across Canada will be organizing a series of public actions for the last weekend of May 2012.